Policy brief

Tackling Europe’s crisis legacy: a comprehensive strategy for bad loans and debt restructuring

Years after the start of the financial crisis, non-performing loans and private debt remain obstacles to the recovery of bank credit and investment.

Publishing date
21 April 2017

Eight years after the start of Europe’s financial crisis, the legacy of non-performing loans and excessive private debt remains a key obstacle to the recovery of bank credit and investment.

The efforts to reduce and remove NPLs from the balance sheets of creditors must simultaneously remove excess debt from the balance sheets of debtors. This is the only way to ensure that bank balance sheets are restored to health sustainably, and that both supply and demand for new credit revive.

About the authors

  • Maria Demertzis

    Maria Demertzis is a Senior fellow at Bruegel and part-time Professor of Economic Policy at the Florence School of Transnational Governance at the European University Institute. She was Bruegel’s Deputy Director until December 2022. She has previously worked at the European Commission and the research department of the Dutch Central Bank. She has also held academic positions at the Harvard Kennedy School of Government in the USA and the University of Strathclyde in the UK, from where she holds a PhD in economics. She has published extensively in international academic journals and contributed regular policy inputs to both the European Commission's and the Dutch Central Bank's policy outlets. She contributes regularly to national and international press and has regular column that appears twice a month in various EU newspapers and on Bruegel’s opinion page.

  • Alexander Lehmann

    Alexander Lehmann joined Bruegel in 2016 and was a non-resident fellow until 2023. His work at Bruegel focused on EU banking and capital markets, private and sovereign debt issues and sustainable finance.

    Alex also heads a graduate programme at the Frankfurt School of Finance and serves as a member of the consultative group on sustainable finance at the European Securities and Markets Authority (ESMA) in Paris.

    In numerous past and ongoing advisory roles Alex has worked with EU and emerging market policy makers on capital market development, financial stability and crisis recovery. Until 2016, he was the Lead Economist at the European Bank for Reconstruction and Development (EBRD) where he led the strategy and economics unit for central Europe and Baltic countries. Previously, Alex was on the staff of the International Monetary Fund and held positions as Adjunct Professor at the Hertie School of Governance (Berlin) and as Affiliate Fellow at the Royal Institute of International Affairs (Chatham House). He holds graduate degrees from the London School of Economics and the College of Europe, and a D.Phil. in Economics from Oxford University.

    His academic, policy and market-related work has generated extensive publications on international finance and regulation. This is regularly presented in teaching, media commentary and industry conferences.

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